The national energy crisis is putting pressure on Australian businesses, who are struggling to cope as rising prices and supply pressures take their toll on their operating budget.
But some businesses are set to feel the impact worse than others; for these industries in particular, shifting power consumption into the off peak hours could save them money on energy.
If it’s possible and practical to shift energy usage, this may then impact wages costs if you need to adjust staffing levels, so it’s a balancing act for all businesses right now. Here’s the hardest hit industries that could benefit from an energy audit:
Factories, warehouses and industrial businesses run multiple heavy-duty machines and equipment every day, which is why the manufacturing industry typically consumes the most electricity. According to the Australian Bureau of Statistics (ABS), they collectively use around 52.4 billion kilo-watt hours (kWh) per year. By comparison, the average household uses around 5,500 kWh.
Mining operations suck up a lot of energy to operate, and at present only a tiny fraction of it (less than 4%) is derived from renewable energy. The industry as a whole is moving towards investing more deeply in renewable energy technologies, including large onsite solar PV and wind power arrays, but right now their heavy reliance on natural gas and grid electricity leaves them exposed to price hikes.
Hotels, high-rises and offices
With lights that stay on all day (and all night), and temperature control in place to make the environment cooler or warmer year-round, these big office or hotel structures are huge consumers of energy.
Restaurants and cafes
Restaurants, cafes, bars, nightclubs and other hospitality venues are amongst the highest energy business consumers. This is due to all the power it takes to run appliances like fridges and freezers for food; commercial dishwashers and ice machines; plus lighting, heating and cooling.
A Queensland supermarket owner was recently left devastated when he calculated that this annual energy bill would almost quadruple, from $58,000 to $218,000. Retailers use energy for long periods of time to power lighting, heating and cooling, refrigeration and special equipment, so this industry is likely to experience an increase in energy costs.
Where to from here?
While the above industries are set to be hardest hit, it’s unlikely that any businesses will escape unscathed.
A new Victorian Chamber of Commerce and Industry survey into the national energy crisis found the current energy market is impacting 47% of companies. A staggering 51% were forecasting changing their business investments over the next two months as a result, while 79% were uncertain about forecasting costs and investments over the next 12 months.
VCCI Chief Executive Paul Guerra said all sectors of the business community, and not just heavy industries that used larger amounts of energy, were concerned.
“We need to explore all options to alleviate pressure on businesses in the short term, while looking at longer term solutions that will provide certainty and benefits for businesses, the economy and wider community,” Guerra said.
To minimise the impact that rising energy prices will have on your business, it’s essential that you engage and take notice of your energy usage and billing. The longer you delay reviewing your options, the more likely it is that you’ll pay too much.
We support a range of SMEs, commercial and industrial businesses in various industries by helping them analyse their current energy needs and compare within the broader energy market to get the best value deal.
Contact us at Make It Cheaper for an obligation-free review to see if we can help your business optimise your energy usage and page a competitive price for your energy. Call us today on 1300 957 721.
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Advances in technology have changed every aspect of our lives over the last couple of decades, from the way we shop, bank and do business, to how we meet new people, order food and interact with the world around us. The energy industry has also evolved, with the biggest change being the move to more renewable generation of energy, says Fred van der Tang, CEO of energy comparison site Make It Cheaper.
“We’re seeing more and more renewable sources of energy coming into the grid, including big solar farms and hydro energy generation,” van der Tang says.
“It’s been somewhat of a slow uptake in Australia and a slow political update, but customers have embraced the evolution of technology, with 30% of Australian homes now having a solar panel on their roof… the appetite for renewable energy is only growing.”
Solar panels are better and more efficient now than they were when they first launched into the Australian consumer market in the early 2000s, with energy users getting “a better bang for your buck and bigger return on your investment” nowadays.
Big opportunity for business savings
The big opportunity lies for businesses, where the uptake of solar has been slower and the potential to save both energy and money is immense.
“For business, the rate [of install of solar] is about 10%, so we have a little way to go. But the introduction of things like smart meters means it’s possible to get more information about your energy usage, so you can tailor your usage to be more efficient.”
van der Tang says this could include things like restaurants setting up timers to turn their fridges or freezers off for certain periods, or offices ensuring that all fans, air-conditioning and lights are switched off when rooms are not in use.
With rising energy prices creating a ticking time bomb for Australian businesses, another big opportunity to reduce your energy bills is by comparing your current plan to make sure you’re getting the best possible deal for your needs.
“At Make it Cheaper, we allow businesses to focus on their business – whether that’s leading their staff, building client relationships or doing their core work – while we do the complex and time-consuming work of comparing relevant energy offers. We navigate the different codes and the jargon and make the complex easy, by presenting the customer options with real dollar savings.”
It depends on the specific situation, but MIC finds “significant savings for more than 80% of the customers we deal with”, he says.
“On average, the amount we save a business is about 8% on their annual energy bill, or $1400 a year. There’s no minimum-sized business, or a business too complex – we offer a one-stop shop and find a solution, no matter the size of the business.”
Once MIC finds you a better deal, “we take care of all the heavy lifting in terms of communicating and facilitating a transfer,” van der Tang adds.
“At the end of the day it’s more dollars in the pocket of the customers, which is an important result of what we do.”
How long has it been since you reviewed your energy plan? You could be spending hundreds (or thousands) more each year than you need to: let us help you find an energy plan that offers great value for money – contact us today.
Looking to save on your business energy bill?
We find savings for 4 out of 5 businesses. See how much your business could save.
Sky-rocketing energy wholesale costs, renewable energy policy, and annual networks and default offer repricing are three big influences in energy costs today. Find out if they’re set to make your energy bills higher or lower – and what the outlook is for the next 12 months.
While almost everyone agrees that renewable energy is the ideal way forward, the path towards an eco-driven energy infrastructure is certainly challenging.
Globally, in 2020 around 29% of all energy produced was generated from sunlight, wind, rain, tides, waves and geothermal heat, up from 27% the year before.
But right now, green energy may be a luxury that some residents and businesses don’t have the option of considering, due to their state’s low uptake of eco-friendly energy supply. Furthermore, their attention may be focused on their bill rather than the environment, with a huge increase in wholesale energy prices set to impact the entire market – most notably two states.
Energy repricing in 2022
A huge influence on your energy bills is the annual repricing by networks (the owners of the poles and wires) and of the default market offers by the regulators, which happen every July.
Energy retailers use these two important changes to update the rates they charge, reviewing their entire energy supply chain including wholesale, operational and environmental costs.
In 2021, this saw energy prices fall. Statistics from the Australian Energy Regulator (AER) confirm that on average, in the fourth quarter of 2021, energy prices decreased in all regions except Queensland and Tasmania compared to Quarter 3 2021.
However in 2022, wholesale energy prices are soaring. The latest data from the Australian Competition and Consumer Commission (ACCC) reveals that energy is currently the cheapest it’s been in eight years, but that’s all set to change.
The global surge in coal prices is set to significantly push up electricity prices across the country, but the hit to your bottom line will be felt the hardest in two states in particular.
Queensland and NSW to feel the brunt of rising prices
Because of their reliance on coal exports, NSW and Queensland will face higher prices than other states. In Queensland, the issue has already erupted, with one retailer, Locality Energy (LPE), announcing their energy prices will literally more than double overnight.
“The Queensland wholesale electricity market is experiencing extreme and consistent price volatility that we have never seen before. This means that LPE can no longer provide competitive rates,” they stated.
“At this point in time, LPE cannot give you an exact price increase. But please be aware that we are increasing your c/kWh usage rate by over 100% by 1 June 2022.”
LPE is not planning to close, but they will “stop servicing customers in the Ergon (south east Queensland) region”, because they don’t want to “place additional financial pressure on customers.” They’re also calling on the government to look at ways to subsidise and stabilise these unsustainable wholesale energy increases, in a similar way that they have for motorists at the petrol pump, in the hope that retailers can pass the reductions on to customers.
Another retailer, Discover Energy, has let customers know their solar tariff is reducing from 16c/ kw to just 1c per kw, citing an oversupply of solar energy. The grid is receiving more energy than it can cope with during peak daylight hours and current energy infrastructure is not equipped to sufficiently manage, store and repurpose it, so retailers like Discover Energy are no longer willing to pay for it.
In addition to energy wholesale prices, other things impact your bill such as:
your current usage
contract benefits period
whether you have solar and/or gas
In the current climate, if you haven’t reviewed your business’s energy contract in the last 6 months, there could be a huge opportunity to save.
We’re calling on the Government to look at ways to subsidise and stabilise these unsustainable wholesale energy costs in a similar way that they have for motorists at the pump. This way retailers can pass on the reductions to customers.
Origin’s coal plant closure
Another influence on energy prices in 2022 is Origin Energy’s decision to close their coal-fired power plant – Australia’s largest one – seven years early.
In February this year, the energy retailer confirmed its plans to retire Eraring Power Station, which has been operating for 35 years on the central coast, in 2025, ahead of its previous retirement target of 2032.
The company will repurpose the Eraring site to install large-scale battery storage of up to 700 megawatts, in alignment with their push into renewables. Similar battery site plans are underway for the shuttered Hazelwood (2017) and Wallerawang (2014) coal power stations.
While this is undeniably a positive move towards a more renewable energy market, it highlights the risks of Australia’s clean energy transition, which is currently without a national or regulated plan for the exit of coal.
Right now, some consumers are benefitting, as renewable energy grows as the cheapest form of electricity generation. But we’re at risk of future closures without clear government policy and oversight, which is having significant impacts on electricity prices, and on regional economies that depend on coal.
Get an obligation-free energy review
At Make It Cheaper we constantly review the energy market, working with businesses to help them take control of their energy bills and achieve potential savings. Contact us for an obligation-free review today on 1300 957 721.
If your business is a large energy user spending more than $2,500 per month or more in electricity costs (equating to around 160 MWh hours per year or more in consumption), it is likely you would benefit from speaking with a professional energy brokering service such as MIC Energy Brokers
Here are the top reasons to use an energy broker:
1. Ensure your rates are competitive
The key reason our clients engage us is to ensure they are not overpaying on their energy rates, relative to current market prices. We monitor the energy price market daily and watch for fluctuation drivers such as policy updates, power stations shutting down, and regional weather impacts.
Apart from an informed approach to the timing of your large market energy contract, it is important that you have an energy broker who works with you to understand your business needs, as each energy procurement contract is bespoke to you and your business. Once these are established the energy broker will go to market to multiple retailers who will compete to provide you competitive commercial energy rates.
2. Take the confusion out energy costs
Energy pricing can be confusing, and misunderstanding your bills can become a costly mistake over the life of a large and lengthy retailer contract. When you engage MIC Energy Brokers your account manager will be happy to explain how your energy bills work and the steps we take to find you a competitive rate and contract terms through our tendering process.
3. Save time
Energy brokers do the difficult and time consuming work of energy procurement and contract management for you.\ As experts in the field, energy brokers can perform market analysis and manage the procurement process much more efficiently than someone in your organisation who only thinks about energy costs a few times a year.
4. Stay on top of your contract
When you engage MIC Energy Brokers to help with your energy contract, we’ll keep on top of your next contract renewal date, ensuring you don’t default to a non-competitive rate with your incumbent retailer.
5. Network Tariff Reviews
Tariffs are set by your network distributor and often change annually. It is unlikely that your retailer will proactively review these charges and, in some circumstances, a one-off event that increases your demand/load could increase your Network Tariff charges which can result in you ending up on the wrong tariff and overpaying. MIC Energy Brokers will review your Network Tariff’s annually to ensure that you aren’t being charged too much.
6. Bill validation
Have you sat down to check that your bills are correct? An energy broker can provide a bill validation service to ensure your are correctly being billed.
7. Multi-Site Experts
If you have a business with multiple energy sites, you know how much work it is to manage these, as Multi-Site specialists we manage your portfolio as well as ensuring you are on competitive rates.
8. Green Energy Solutions
Green energy is becoming a priority for many businesses, the MIC Energy Broker team can assist with corporate PPA’s or carbon offset plans.
9. Not just brokers, but energy experts
The advice we provide extends to more than just tendering your energy account to different retailers. We monitor the wholesale electricity market constantly, and will advise on the best strategies to optimise your contract timing and approach tendering based on your business energy needs.
Find out more for free
Our tendering service for commercial and industrial customer is completely obligation free for your business. Get a call back from an energy specialist in our team to find out how we can help your business manage your energy procurement to save you both time & money.
Saving on expenses such as your electricity bill is a major priority for many Australian SME’s, but finding competitive energy rates can be both time-consuming and challenging. Many businesses may find themselves wondering how exactly their rates are calculated, how they stack up against residential prices, what energy retailers are available in their area and most importantly, how can they get a great deal for their business. Since we believe the process of finding cheaper business energy should be easy and quick, we’ve answered all these questions for you below.
Business vs residential electricity charges
Just like your home electricity account, Australian businesses with metered premises located in the following states and territories, are able to shop between energy suppliers energy retailers to take advantage of cheaper electricity rates, higher discounts and other more favourable contract terms.
New South Wales
South East Queensland (including Brisbane, Gold Coast, Sunshine Coast and Ipswich)
Australian Capital Territory
Business energy users located in Western Australia, Tasmania, parts of regional Queensland and the Northern Territory have less retailer choice and electricity rates continue to be set within a government regulated market.
Most retailers offer separate business electricity plans business plans with different terms from residential electricity offers. Whether you’re looking to invest your savings back into growing your business, or lock in rates and an attractive discount for a set period to provide certainty over your business costs, Make It Cheaper’s business energy experts can guide you through the process of finding a better business energy deal for you.
Is electricity cheaper for businesses?
In the same way a residential electricity rate is calculated, your business electricity rate will depend on a number of factors, such as your energy usage by kW/h, business electricity supplier you choose to go with, and the actual retailers available to you base on where you located in Australia. Rates for business energy are determined by different variables (see Understanding your business electricity rates below) and there are a number of discounts available to businesses to help them find additional savings (see Business electricity rate discounts below).
To ensure you get the best energy rate for your business, speak to any of our Make It Cheaper business energy experts who’ll compare electricity prices on your behalf.
Where to find business electricity rates from energy suppliers
All Australian retailers in deregulated markets (listed above) are required to clearly set out business electricity rates in an Energy Price Fact Sheet.
Make It Cheaper Australia compare business electricity rates and plans across a panel of leading energy retailers. You can find out more information about retailers on our energy retailers page:
Detailed comparison of business electricity rates can be a time consuming process – while all rates are publicly accessible online, differences in components of pricing such as supply charge, discounting, peak/off-peak and shoulder timing create additional complexity that can significantly affect your final bill.
Online comparison services such as Make It Cheaper do the hard work for Australian businesses looking to find the cheapest electricity rates.
Understanding business electricity rates
The total cost of your business electricity is divided between a fixed daily ‘supply’ charge and a variable usage charge.
Variable usage charges can be structured in several different ways depending on your business energy plan:
Single rate business electricity tariffs – one standard kW/h rate that is the same at all times of the day and and all days of the year
Time of use business electricity tariffs – different kW/h rates apply based on the time of day the energy is consumed. Typically, a ‘peak hour’ rate for periods of highest demand, an ‘off peak’ rate and ‘shoulder’ rates that sit between peak and off-peak times. Different providers and electricity plans can also define these times at different hours of the day and days the week so it is important to understand the patterns of your business electricity usage to properly compare time of use tariffs.
Controlled load tariffs – a special rate that typically applies to separately metered appliances such as a timed electric hot water heater that will only run during off-peak hours.
For most businesses, selecting a business electricity plan and choosing between single rate tariffs or taking advantage of lower off peak rates under a time of use plan can have significant cost implications to your overall bill. Consider how your business operates, and whether there are regular patterns to your overall electricity consumption. A business energy specialist at Make It Cheaper can help you select a better electricity plan for your account.
Business electricity rate discounts
In addition to the supply and kW/h usage rates applicable for a particular business energy plan, retailers will often offer two types of discounts on top of usage rates:
Conditional discounts which will only be applied if certain conditions are met. For example, a pay on time discount applied as long as the bill payment is not made past the due date
Guaranteed discounts which will be applied throughout the contract term and are not contingent on any special conditions
The discounts offered by an energy retailer will differ from retailer to retailer, but are great opportunities for you to maximise savings for your business that can be spent better elsewhere.
Which electricity supplier has the most competitive rates?
Because of the different component charges – supply costs, usage tariffs, peak/off-peak rates and discounts – working out if a new electricity provider or plan will actually save you money requires accurately calculating all of these variables against your existing and rates. It’s not enough to simply compare the size of discounts offered by retailers as their actual tariff rates can differ: a large overall headline discount does not necessarily mean the largest saving.
Comparing business electricity prices
The cost of your business electricity can vary significantly between different energy providers and be the difference between thousands to tens of thousands in annual savings depending on your level of usage. Just imagine how much further you could grow your business by freeing up unnecessary costs, such as in your energy bill.
If you have a recent bill, a business energy expert at Make It Cheaper Australia can do the hard work for you and compare multiple offers from our panel of up 10 Australian retailers and perform the switching for you.
With our innovative DiFY (Do it For You) product, we can ensure you’ll automatically be searching for a more competitive deal every time your contract comes up for renewal, and we’ll even switch for you without having go through a comparison phone call again. Learn more about DiFY.